Facebook is to launch its own cryptocurrency within the next year, saying its plans will deliver an “inclusive and open” financial ecosystem.
The currency, to be called Libra, is part of a Calibra digital wallet package under development that will be available as a standalone app before mid-2020.
It will allow only payments between users initially, via smartphones or other devices, but Libra will be open source – meaning the currency can be included in existing digital wallets.
Facebook said Libra was to be a medium for payments rather than a Bitcoin-style cryptocurrency – largely unregulated and vulnerable to wild fluctuations in value.
The company said it would have “no special role” in governing Libra.
It explained that the value would be underpinned by a reserve of real assets managed by a string of big firms under a not-for-profit umbrella organisation.
It said the Libra Association was aiming to attract 100, largely multi-national, entities by the time of the launch.
Each must pay $10m (£8m) to get on board.
There are currently 28 such firms signed up, including Spotify, Uber and Vodafone.
Facebook said Libra was being supported by not only a reserve of the world’s best assets but also the world’s most trusted central banks.
David Marcus, who started exploring the blockchain-powered currency at Facebook a year ago, said the banks had given Libra “general cautious support”.
He said: “Libra holds the potential to provide billions of people around the world with access to a more inclusive, more open financial ecosystem.”
The Bank of England told Sky News it had no comment to make on Facebook’s plans while other regulators were yet to reveal an official view on the potential for global financial stability implications.
Facebook said the services available via the Calibra wallet would eventually be opened up to allow things such as payments for goods and services.
It also moved to ease concerns about data collection by saying account information would not be shared with Facebook except for “limited cases” where the data may be shared “to keep people safe, comply with the law, and provide basic functionality to the people who use Calibra”.
Stefano Parisse, group director of product and services at Vodafone, said: “As a Founding Member of the Libra Network, Vodafone will extend its commitment to digital and financial inclusion by supporting the creation of a new global currency and encouraging a wide range of innovative financial services to be developed through its open-source platform.
“This has the potential to be truly transformative and will benefit those who have never used, or are struggling to access, financial services around the world.”
Source: SKY NEWS